Adventus buys Beaty-backed Luminex for Ecuador focus

Canadian junior Adventus Mining (TSX-V: ADZN; US-OTC: ADVZF) is acquiring cohort Luminex Resources (TSX-V: LR; US-OTC: LUMIF) in an all-stock deal to focus on copper and gold development in Ecuador.

The transaction will see Luminex shareholders receive 0.67 of an Adventus share for each held. The company will continue to trade under the Adventus name and ticker. No cash figure was given for the deal in a company news release on Tuesday. Luminex shares closed at 20¢ apiece on Monday in Toronto and Adventus was at 38¢.

Adventus, whose shareholders now include Canadian Mining Hall of Fame member Ross Beaty as well as streaming company Wheaton Precious Metals (TSX: WPM, NYSE: WPM; LSE: WPM), says it will advance two main projects towards production and consolidate a large exploration portfolio in the South American country.

One of these projects is the El Domo-Curipamba copper-gold deposit, which is at feasibility stag3. The other is the Condor gold project which completed a preliminary economic assessment (PEA) in 2021.

“For Adventus shareholders, the new capital and acquisition of Luminex’s Condor project and other properties allows the creation of a stronger and more diversified company with one of the largest copper-gold exploration portfolios in Ecuador,” Adventus president and CEO, Christian Kargl-Simard, said in the statement.

Alongside the transaction, the company announced concurrent financing of US$17.1 million with participation by Beaty and the Randy Smallwood-led Wheaton Precious Metals.

Two projects

Shares in Adventus fell to 35¢ each on Tuesday morning, valuing the company at $61.9 million. They’ve traded in a window of 22¢ to 62¢ for the last 52 weeks. 

Adventus touts the El Domo–Curipamba project as the next modern mine in Ecuador, leveraging one of highest copper-gold grades and lowest capital intensities globally.

The project, which has attracted investment from the Ecuadorian government, is completing its environmental consultation with a construction decision expected in the first half of next year. 

The Condor project in southeast Ecuador is about 35 km south of the Fruta del Norte mine held by Lundin Gold (TSX: LUG). It’s also close to El Mirador copper mine, run by Ecuacorriente, a subsidiary of the Chinese consortium Tongling-China Rail. The PEA for Condor outlines a 12-year operation producing 187,000 oz. of gold per year.

The company will also have one of the largest exploration portfolios in Ecuador, made up of more than 1,350 sq. km across 13 projects. 

All on board 

Besides Wheaton Precious Metals and Beaty’s Lumina Group, the acquisition has the support of local Ecuadorian investors and strategic equity investors including Altius Minerals (TSX: ALS; US-OTC: ATUSF), Adventus said.

Before completion of the concurrent financing, Adventus shareholders will own 61% of the resulting company and Luminex shareholders 39%. Beaty is expected to be the only shareholder post-transaction to own more than 10% of the issued and outstanding shares.

“This combination gives Luminex shareholders a more immediate re-rating and return potential from the advancement of the El Domo project,” Luminex CEO Marshall Koval said in the release.

 

Mining was Ecuador’s fourth-largest source of income last year behind sales of oil, bananas and shrimp, bringing in US$2.8 billion to the state’s coffers.

Growing opposition to extractive activities in the past two years is blocking nearly US$1 billion in potential investment and 100 projects for the next two years, the country’s Chamber of Mining says.

An exception is SolGold’s (LSE: SOLG) Cascabel copper-gold project, which was granted a 25-year license renewal in July.